Bonza has its AOC
if demand falls off a cliff they still have the large overheads but no income on the lower performing routes, with no way to redistribute the fleet as they are already covering the trunk ones to capacity.
Why would you redeploy high sector cost RJs when you have 200 odd trunk airliners sitting idle in a demand glut. And BTW as with the VA case any 737 that gets returned to a lessor will be snapped up cheaply by the competition, which was Rexs game plan when VA went under. The lessor will just offer it to another local player to avoid having to fly it away to offload. Most likely the owned RJs get pushed against the wall, returned to leasehold, or continue to operate the FIFO or whatever else they were bought for in the first place. Have to remember the current boon in passenger numbers is a result of pent up travel from the Covid lockdowns, its returning to normal and may even cause a glut of discretionary travel as people realise that life will return to normal, but now they have less money... I've already heard that QF group is practicing some yield management on routes they jumped onto, with the larger capacity aircraft they are now canceling/combining flights to make them more profitable as demand eases off.
PS an F100 even EJets are not that much cheaper than a 737 to operate, due to a number of reasons not just fuel related. However they are way cheaper to push against the fence due to the much lower capital costs involved. And if you were to drop to those aircraft on trunk routes while the opposition used 737/A320 you might find a lot of passengers change stripes.
Imagine what happens when you send a 737 back to lessor and put the crew on LWOP or sack them. The opposition will just take them in this climate and the jet and crew will be added to the woes against you.
PS an F100 even EJets are not that much cheaper than a 737 to operate, due to a number of reasons not just fuel related. However they are way cheaper to push against the fence due to the much lower capital costs involved. And if you were to drop to those aircraft on trunk routes while the opposition used 737/A320 you might find a lot of passengers change stripes.
Imagine what happens when you send a 737 back to lessor and put the crew on LWOP or sack them. The opposition will just take them in this climate and the jet and crew will be added to the woes against you.
The E190 and F100 are certainly not high sector cost but to answer YOUR question, because YOU said demand drops off a cliff leaving them wrong sized.
This makes no sense, you have no idea. The group operated RJs as you keep calling them are very cheap for QF.
Most likely the owned RJs get pushed against the wall, returned to leasehold, or continue to operate the FIFO
I actually have a very good idea of the operating cost of the E190 vs the 737 its not a huge difference in the grand scheme of things. Fuel burn yes the E190 is much better but other areas cost more, the 737 is like the Ford Falcon of aviation, its cheap, cheap parts, mass available spares, economy of scale etc etc. The EJets are a bit like a Euro car made in Brasil, everythings a little more expensive but it burns less fuel. A bit like the ATR 72 vs the Q400, the Q400 is cheaper to maintain and can do more sectors per day, as well as longer TBOs, the ATR uses much less fuel, but just about everything else costs more due to lower component times etc etc.
RJs are lower cost to operate thin longer routes or in particular in Australia the FiFO market. WRT the use of them as regional airliners here, they only work if near full constantly, otherwise the Q400 is way better economics wise. The NJS 717s are probably experiencing more maintenance issues due to overextending times when things should have been replaced, that's usually a sign they are trying to get blood from a stone economics speaking.
RJs are lower cost to operate thin longer routes or in particular in Australia the FiFO market. WRT the use of them as regional airliners here, they only work if near full constantly, otherwise the Q400 is way better economics wise. The NJS 717s are probably experiencing more maintenance issues due to overextending times when things should have been replaced, that's usually a sign they are trying to get blood from a stone economics speaking.
I think you miss the point that the RJs are disposable assets in a downturn, but the trunk airliners will be needed in the recovery to provide capacity. As I said before its way cheaper to push the RJs out in a slowdown, with an expected recovery than it is to furlough the main fleet and re-engage it when things pick up. Looking at the overall picture here not just static fuel burns and crew costs in isolation.
But the original statement was that if QF is already providing maximum capacity in order to maintain 60% or whatever of the market, if a downturn occurs they will be massively over capacity. Its then not about what jet you put on the route as you are supporting the costs of equipment and staff that have no purpose as there is no revenue to support them. The smaller competition has less to support so can support lower prices and still make ends meet, while sucking passengers from the larger operator. A capacity war that QF has usually fought has used its size and profit on its network to push prices down on competitive routes. A general capacity decline, or economic downturn means all route revenue declines, so you can't use one to leverage the other. Rex and VA to an extent are struggling to meet demand with the few aircraft they have, so in a downturn it will not affect them much at all.
But the original statement was that if QF is already providing maximum capacity in order to maintain 60% or whatever of the market, if a downturn occurs they will be massively over capacity. Its then not about what jet you put on the route as you are supporting the costs of equipment and staff that have no purpose as there is no revenue to support them. The smaller competition has less to support so can support lower prices and still make ends meet, while sucking passengers from the larger operator. A capacity war that QF has usually fought has used its size and profit on its network to push prices down on competitive routes. A general capacity decline, or economic downturn means all route revenue declines, so you can't use one to leverage the other. Rex and VA to an extent are struggling to meet demand with the few aircraft they have, so in a downturn it will not affect them much at all.
Sydney airport…
Just brilliant. Australia being unique and all.
A Sydney Airport spokeswoman said it would be "delighted" to have Bonza operating there.
"The unfortunate reality is that Sydney Airport is the most constrained and regulated airport in the world, which means we have very limited capacity during peak periods," a spokeswoman said.
"The unfortunate reality is that Sydney Airport is the most constrained and regulated airport in the world, which means we have very limited capacity during peak periods," a spokeswoman said.
The following users liked this post:
There is an impending capacity war coming, I think July we will see this. Fares will drop to pre COVID levels the question is how low can the likes of Rex and Bonza go and be prepared to stay that low.
Capacity wars are margin draining. Something Bain won't want to get involved in. I really don't think we will see that much capacity coming in, Virgin and Jetstar will soon be receiving one aircraft per month, all indications is that Jetstar are sending a A320 out west as each A321 arrives. Virgin have a whole pile of ageing aircraft to deal with also.
Why? not required & limits getting staff.
The wellbeing, safety and security of our people, customers and operations come first. Under our COVID-19 Vaccination Policy we require all legends at Bonza to be fully vaccinated against COVID-19. More information will be provided during our recruitment process.
The wellbeing, safety and security of our people, customers and operations come first. Under our COVID-19 Vaccination Policy we require all legends at Bonza to be fully vaccinated against COVID-19. More information will be provided during our recruitment process.
Another bad omen for Bonza. Flyr of Norway a low cost carrier operating to leisure destinations has just collapsed. A fleet of 12 x B738, of which 6 were the MAX. Their business plan was for a fleet of 30 B738-MAX. Been operating just over 18 months. Classic case of overestimating the passenger traffic and underestimating the costs. Flyr did not have a reservation system and relied upon a mobile phone app for all sales.
Unless Bonza change their business plan I doubt they will see August 23.
Unless Bonza change their business plan I doubt they will see August 23.
Here is the plan from a ABC article. So pretty much what Tiger did at the start. Just be mindful booking way ahead, you might be a victim of the flexible experimenting.
777 founder Steve Pasko was on Bonza's inaugural flight on Tuesday and said he saw an opportunity in the Australian aviation market, which lacks an independent budget carrier. (Jetstar is owned by Qantas.)
Mr Pasko said 777 was budgeting for Bonza to run at a loss for 12 months and hoped it would become profitable in its second year.
He said Bonza needed to consistently fill about 90 per cent of seats and the airline would be "flexible" by experimenting with its destinations and frequency.
Mr Pasko said 777 was budgeting for Bonza to run at a loss for 12 months and hoped it would become profitable in its second year.
He said Bonza needed to consistently fill about 90 per cent of seats and the airline would be "flexible" by experimenting with its destinations and frequency.
Another bad omen for Bonza. Flyr of Norway a low cost carrier operating to leisure destinations has just collapsed. A fleet of 12 x B738, of which 6 were the MAX. Their business plan was for a fleet of 30 B738-MAX. Been operating just over 18 months. Classic case of overestimating the passenger traffic and underestimating the costs. Flyr did not have a reservation system and relied upon a mobile phone app for all sales..
Well they need to start flying them a bit more, I’ve been to MCY a number of times since the first flight and their aircraft have been all closed up tucked away in the corner, not sure if it’s bad timing or that they aren’t actually flying much at the moment.
Looks like first regular flights are
14th MKY
16th to PPP
21st AVV
22nd TSV
Interestingly Flight Radar has them running AB101 SYD-BNE daily at 10.30am, perhaps a sign of things to come ?
14th MKY
16th to PPP
21st AVV
22nd TSV
Interestingly Flight Radar has them running AB101 SYD-BNE daily at 10.30am, perhaps a sign of things to come ?
